Monte Carlo (MC) simulations with and without a technique to enhance variance reduction are examined. It is found that simulated lidar measurements are more stable without the use of a technique to enhance variance reduction. The Monte Carlo simulations are used to examine the sensitivity of the Klett and Weinman lidar inversion techniques. It is found that special care must be taken when dealing with non-homogeneous cloud (phase functions and extinctions are different for the different segments). For these cases, good inversion results can be obtained only when one applies Klett lidar inversion to each homogeneous subrange of the cloud, otherwise, large inversion errors could be generated. When the cloud is homogeneous (same phase function but the extinction can be different) and when total optical depth is available, Weinman inversion can be used with success. Weinman and Klett inversions technique are technically equivalent.